When Sarah Juma was starting her business, Innovate Inclusion, potential funders explicitly said her company would do better with a white man at the helm.
“I’ve experienced people doubting that this is really my company,” says the founder of the Ontario not-for-profit that advocates for underrepresented communities in technology and entrepreneurship. “I’ve been told that I should get a white male to lead my team if I want to move ahead faster. A lot of VCs are white males, and [if] you’re coming in as a Black female, you’re just starting at a deficit.”
Whether your company is non-profit or for-profit, the biggest pain point of being a Black female founder is the same: a lack of access.
High-net-worth individuals, angel investors and venture capitalists tend to have personal and professional networks of people who look and think like them, which means those founders are the ones who can access capital most easily. Even business incubators, which are supposed to help level the playing field, aren’t immune.
In 2017, in partnership with the University of Waterloo, Juma’s company produced a report on diversity in Ontario incubator programs that found an extreme lack of cultural diversity from the board level down to mentors. Incubators have been a petri dish of innovation and creativity, but Black-owned startups have largely been excluded.
Unfortunately, we still don’t have hard numbers on the degree to which Black women have been excluded or the impact on their incomes. For years, there has been research on the gender wage gap among full-time Canadian employees, including a report commissioned by the Canadian Women’s Foundation that found female workers in Canada earned an average of 75 cents for every dollar earned by men in 2016, a number that decreases to just 67 cents for racialized women.
But, as business consultant Amoye Henry points out, there’s very little research geared toward full-time business owners.
That’s something Henry is seeking to change. When the Canadian government distributed a $30-million grant for diverse entrepreneurs, it supported 300 recipients, but only two were Black women. That, and the fact race-based statistics are so rarely collected in Canada, was the impetus for Henry to create Pitch Better, a national database of
Black female funders that would make it easier for funders to find and fund strong and stable businesses through market research. “Black women are lumped into the visible minority category, [but] our group comes with different nuances and challenges. Unfortunately lumping us into the visible minority category limits us from being able to be looked at and supported in the ways that we need to be,” Henry says.
Early findings from the organization’s continuing FoundHers research study indicate that 2 per cent of recipients of private venture capital funding are women, and only 0.02 per cent are Black women. This is part of the issue with diversity initiatives—they often address gender, but rarely consider race, ability, or other intersecting identities.
This additional pressure often leads to Black women closing their businesses. “Burnout is a very recurring theme in our research of Black women founders,” Henry says. “Because not only did they have the burden of running and operating their business, but they had the burden of funding most of it from scratch while still taking care of their other responsibilities and carrying the weight of racism.”
Melissa Allen, a former financial advisor at Desjardins Group, is also working to improve access for Black female founders in her role as partner and chief operating officer at Bay Mills Investment Group, the first Black-owned venture capital fund in Canada. Bay Mills aims to transform what innovation and entrepreneurship look like in Canada by increasing equity in the world of private funding.
She also encourages founders to network outside their comfort zones. “You may experience a sea of rejections, but there are many funders who truly want to meet and support talented Black entrepreneurs,” she says.
That sentiment is echoed by Laura Didyk, vice-president of client diversity at Business Development Bank of Canada (BDC), Canada’s only institution devoted to entrepreneurs. While the organization’s definition of diversity used to be strictly gender specific, it has since expanded its focus to include race. BDC has also partnered with the Canadian Black Chamber of Commerce to fund a new study on building Black businesses in Canada.
Didyk says the top challenges those businesses self-reported were a lack of financial literacy and access to networks outside their own communities. Knocking down those doors has been an integral part of helping to change the landscape. Along with providing unconscious-bias training, and a host of free online resources (including some specifically for women), BDC believes partnering with organizations on the ground, including Pitch Better, will allow for a full and complete understanding of the problem and how to solve it.
There is still work to be done, despite increased awareness of these issues. After the global outcry following George Floyd’s death, some activists encouraged people to support Black-owned businesses and to vote with their dollars. Each of the Black women interviewed for this piece concluded that, while there may have been increased interest, it didn’t necessarily translate to actual dollars.
“It has certainly put me in positions of amplification. It opened me up to opportunities, working with brands that I wouldn’t have had before,” says Vivian Kaye, CEO of beauty brand Kinky Curly Yaki. “A lot of these funders look through peepholes, and then [last summer] they realized there’s a world outside of that peephole. George Floyd, unfortunately, kicked that door open. But for me, it hasn’t necessarily translated into helping me fund my business.”
Black female founders are not looking for a handout. Quite the opposite—they are more likely to bootstrap their businesses than any other group of entrepreneurs. But they are looking for the same chance to present their ideas to the gatekeepers who can help them scale their businesses, so they can become employers and positive additions to the Canadian economy.
Published one year after the killing of George Floyd and the ensuing global reckoning over anti-Black racism, the Time for Change special report is intended to amplify the voices of Black leaders, while shedding light on the work that still needs to be done to combat systemic inequalities across infrastructure, employment and other facets of daily life.